UK Renters’ Rights Bill: What You Need To Know

The Renters’ Rights Bill, set to become law in England by the summer 2025, represents the most significant change to the letting regulations in the country in over four decades. All property management businesses must understand how this legislation will affect day-to-day management practices and tenant relationships. 

Here are the key aspects of the bill and their implications.

One of the most notable changes introduced by the Renters’ Rights Bill is the abolition of so-called “no-fault” evictions under Section 21. This means it will no longer be possible to evict tenants without providing a specific reason. Instead, agents must use Section 8 grounds for possession, which require them to demonstrate a valid reason for ending the tenancy.

This change aims to provide more security for tenants, but it also means there is now a need to be more strategic with property management and agents will need to familiarise themselves with the specific circumstances under which they can regain possession of the property, as outlined in the bill.

The bill introduces a simpler tenancy structure where all assured tenancies will become periodic. This means that fixed-term tenancies will be replaced by open-ended agreements. While this offers tenants more flexibility, it also impacts how property management companies and their landlords plan for property turnover and potential sales.

Overall, everyone should be prepared for longer-term tenant relationships and adjust business models accordingly. This might involve more focus on tenant satisfaction and property maintenance to encourage long-term occupancy.

Under the new legislation, tenants will benefit from a 12-month protected period at the beginning of their tenancy. During this time, they cannot be evicted in order for others to move in or for the property to be sold. Additionally, when using these grounds after the protected period, tenants must receive four months’ notice.

This extended notice period gives tenants more time to find new accommodation but requires agents to plan further ahead when considering instructions regarding selling or repurposing properties.

The Renters’ Rights Bill introduces new safeguards against excessive rent increases. Tenants will have the ability to appeal above-market rent increases that they believe are designed to force them out. However, it will still be possible to increase rents to market prices.

It’s important for the agents to know local market rates and justify any significant rent increases. Consider implementing a fair and transparent rent review process to avoid potential disputes.

The bill introduces a new Private Rented Sector Database, which agents will need to register on to use certain possession grounds. This database aims to increase the understanding of legal obligations and demonstration of compliance.

While this adds an administrative step, it also provides an opportunity to showcase commitment to good practice.

A new ombudsman service will be established to provide quick and impartial resolution for tenants’ complaints about the parties managing the property they rent. This system aims to bring tenant-agent dispute resolution in line with practices in social housing.

Agents should be prepared for potentially more formal complaint procedures. Implementing clear communication channels with tenants and addressing issues promptly can help prevent escalation to the ombudsman.

The Government’s impact assessment acknowledges that the new legislation may lead to increased costs for landlords, which could potentially be passed on to tenants. The National Residential Landlord Association (NRLA) has warned that cost increases of up to 10 percent could result from the measures included in the bill.

Landlords should talk with whoever manages their property to carefully review their financial models and consider how these potential cost increases might affect their business. It may be necessary to adjust rental prices or find ways to improve efficiency in property management.

It’s worth noting that student residences are exempt from certain aspects of the bill. It will still be possible to remove tenants at the end of the academic year. For those who manage student lettings, it’s important to understand which parts of the legislation apply to which properties

As a landlord, if you’re partnering with Urpad Property Management or other similar organisations, you should contact them to ensure both they and you are prepared for this new bill. Here are some steps that should be taken: 

1. Review the current tenancy agreements and consider how they’ll need to change.
2. Ensure familiarity with the new possession grounds and ensure there are systems in place to document relevant information.
3. Plan for potentially longer notice periods when considering property sales or repurposing properties.
4. Be aligned with local market rates to justify rent increases if necessary.
5. Ensure registration on the Private Rented Sector Database.
6. Review communication channels with tenants in order to address issues promptly and avoid escalation to the new ombudsman.
7. Review the financial model to account for potential cost increases.

 While the Renters’ Rights Bill introduces significant changes to the rental landscape, it also presents an opportunity for property management companies and their landlords to demonstrate their commitment to a fair and professional industry. By staying informed and adapting practices, these changes can be navigated successfully so as to maintain positive relationships with all tenants.

You can find out more by either contacting David Maidment our Operations Director at Urpad Property Management on 0117 427 0011 or by emailing at [email protected], or you can find out more on www.gov.uk